All posts tagged Kansas City Fed

Federal Reserve Bank of Kansas City leader Esther George, who spent last year arguing that it was time for the central bank to pull back on its easy money policies, praised on Thursday the Fed’s decision last month to finally do so.

Ms. George said she fully supported the Fed’s decision to trim the pace of its bond buying stimulus effort to $75 billion, from $85 billion, in December. She said in the text of a speech prepared for deliver before a bankers’ group in Madison, Wis., that the action is only a first step, however. Read More »

The single-family home isn’t obsolete, yet. But the aging of the baby boomers could reshape the U.S. housing market and economy in the coming years.

As the boomers get older, many will move out of the houses where they raised families and move into cozier apartments, condominiums and townhouses (known as multifamily units in industry argot). A normal transition for individuals, but a huge shift in the country’s housing demand. Read More »

Kansas City Fed President Esther George renewed her attack on the central bank’s aggressively easy monetary policy, saying the institution should start cutting its bond-buying stimulus.

“The benefits of quantivative easing have been quite small, and the potential costs of the program grow each month as we buy those assets,” Ms. George said Thursday.

When it comes to cutting the pace of the Fed’s $85 billion-per-month in bond purchases, “it would be important to start now, to start slowly to allow markets time to adjust, to recognize this is likely to be a long process in terms of unwinding” the bond purchases.

Ms. George’s comments came from a speech before a local group in Oklahoma City. She is a voting member of the monetary policy-setting Federal Open Market Committee, and has over the course of the year carved out a role as the institution’s dissident with the highest profile. Read More »

The Federal Reserve‘s decision this week to keep up its bond purchases risks a spike in interest rates and clouds the credibility that is needed for future policy to be effective, a Fed official warned Friday.

As the lone dissenter of the Fed’s policy decision Wednesday, Kansas City Fed President Esther George explained she is worried the Fed’s ongoing efforts to stimulate the economy fail to take into account the economic progress already made and raise future costs. Ms. George has now cast a dissenting vote at each of the Fed’s six policy meetings this year.

“Waiting for more evidence at this point, in the face of economic growth, unnecessarily discounts the progress we’ve seen, unnecessarily discounts the costs of this tool,” the central banker said in a speech before the Manhattan Institute for Policy Research in New York. Read More »

In a day of Fed surprises, one thing proved as predictable as the setting sun: Kansas City Fed Esther George’s dissenting vote.

For the sixth time in six Fed meetings so far this year, Ms. George voted against her colleagues’ collective decision to press forward with their $85 billion-per-month bond-buying program, which is aimed at spurring growth and lowering unemployment.

Ms. George has argued the Fed’s current policies risk creating new financial bubbles and excessively high inflation.

Many investors had expected the Fed would decide at its Wednesday policy meeting to start reducing its monthly bond purchases. Some had also thought that if that happened, Ms. George might not dissent. Read More »

A Federal Reserve official on Friday called for the central bank to agree to start unwinding its bond-buying program at its coming meeting, reducing monthly purchases to an initial $70 billion.

Federal Reserve Bank of Kansas City President Esther George called for a “gradual” unwinding of the stimulus program, and repeated her belief that it should end sometime during the first half of next year.

The Fed at its June meeting laid out a plan to slow bond purchases later in the year and stop them in 2014 if the economy improves as expected.

“For example, an appropriate next step toward normalizing monetary policy could be to reduce the pace of purchases from $85 billion to something around $70 billion a month, then have purchases going forward split evenly between Treasury and agency-MBS securities,” said Ms. George in her prepared remarks Friday. Read More »

The official agenda for the Kansas City Fed’s annual economic summit in Jackson Hole, Wyo., is officially out, as is the list of lucky central bankers, foreign dignitaries, academics and Wall Streeters.

Despite the meaty issues that will be discussed over the next two days, this year’s Jackson Hole conference is perhaps most notable for what’s not on the agenda: Anything about the tenure and legacy of Federal Reserve chief Ben Bernanke, who will not be attending..

Instead, the conference — which kicks off tonight with a dinner hosted by Kansas City Fed President Esther George — will focus on the impact of the Fed’s unconventional policies at home and beyond. The papers and discussion on Friday will center on the situation the Fed has grappled with since the 2008 financial crisis: short-term interest rates close to zero but the economy still flailing, prompting experimentation with new policy tools — and how those tools work. Read More »

The farm economy showed signs of slowing in parts of the U.S. during the second quarter, even as agricultural-land values continued to climb, according to new Federal Reserve reports.

Regional bankers in a quarterly survey by the Federal Reserve Bank of Kansas City said farm incomes fell in the second quarter and declines are expected in the third quarter, too, amid sharp declines in the prices of crops such as corn and soybeans from record highs a year ago.

A separate survey by the Federal Reserve Bank of St. Louis found bankers expect a pullback in farm incomes in the third quarter after a modest increase in the second quarter.

Farmland prices, which have risen rapidly in recent years amid historically high crop prices, continued to increase in the latest three-month period. Read More »

Factory activity in the Plains states is rebounding this month but expectations eased, according to a regional Federal Reserve bank report released Thursday.

The Kansas City Fed’s manufacturing composite index increased to 6 in July–the highest reading since August 2012–after dropping to -5 in June, a contraction that was weather-related. A reading below zero denotes contraction.

On a year-over-year comparison, the composite index slipped to 2 from 3.

“Production and shipments rebounded after being disrupted by storms last month,” said Chad Wilkerson, a Kansas City Fed economist. “And while some firms remain hesitant to expand, overall capital spending and hiring plans remain positive.” Read More »

The Federal Reserve‘s highest-profile internal critic on Tuesday renewed her call for the central bank to wind down its bond-buying program, amid an improving economic landscape.

Federal Reserve Bank of Kansas City President Esther George told a conference at her bank that she would like to see the central bank “systematically” begin to slow the pace of its Treasury- and mortgage-bond buying very soon, and end the purchases some time in the first half of next year.

“We are on a steady and sustainable growth path,” amid better news about the job market and a recovery in the housing sector that together will likely contribute to growth of around 2% this year, Ms. George said. The official allowed that the current unemployment rate remains high, but she said there are limits to what monetary policy can do for a jobs market that is in any case in the process of healing. Read More »

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